Saint Sandy or a pain in a Porsche?

FINANCIAL Mail was the first newspaper to say, in no uncertain terms, that the bloated bosses at Standard Life were paid far too much. The bonuses at the mutual insurer, we said, were obscene, especially at a time when policyholders' bonuses were being savagely cut by an average of 20%.

That was nearly two years ago and the predictable response at Standard Life's swanky Edinburgh headquarters, renowned for its hatred of criticism, was one of apoplectic rage, angry raising of corporate kilts, and denial.

The chief executive at the time, Iain Lumsden, now thankfully put out to Highland pastures for good, flew straight to London to complain in person at Financial Mail's office.

His pay - at the time not far short of £1m - was nothing at all to do with him, he pleaded. It was decided, after a lot of sound advice from highly qualified external consultants, by an independent remuneration committee.

It was all perfectly right and proper, Standard's spin doctors maintained, that Lumsden enjoyed hundreds of thousands of pounds worth of performance-related bonuses while the company staggered from one calamity to the next, and while policyholders' own bonuses went up in smoke.

So last week's decision by Standard's present boss, Sandy Crombie, to forgo a £500,000 bonus is a welcome admission, finally, that the top brass of the company must now share some of the pain that its customers have suffered.

Hats off to Crombie for telling Financial Mail, quite plainly, that the bonus scheme that Lumsden so richly milked, was 'badly designed'. That confession is a million miles from the arrogant denials that characterised the previous regime.

And £500,000 is a vast sum, even to a wealthy 55-year-old man such as Crombie, who has a penchant for Porsches.

But let's not get too carried away with placing a halo above his head. Crombie has a long, long way to go to earn policyholders' trust. After all, he is the man who is spearheading the move to turn Standard Life into a stock market-quoted company, putting an end to 80 years of tradition and leading policyholders into uncharted, shark-infested waters.

Why is he so set on the path to demutualisation that he announced 12 months ago? Despite a series of policyholder updates containing glib reasons why conversion is the only way forward, he has still not really justified his decision.

Maybe it is because, as he so loudly asserts, that demutualisation is in the best interests of both the business and of policyholders. Only time will tell.

But maybe, too, it is because overseeing such a dramatic corporate event will in the near future earn him a great deal more prestige and wealth than the £500,000 he has just so magnanimously declined.

Two jags Prescott? How about Two Porsches Crombie?

Here's our prescription for Manek . . . quit now

WE hope 2005 will be a better year for those brave 25,000 investors who have money tied up in the £57m Manek Growth fund. It is managed by Jayesh Manek, the ex-Sunday Times fantasy shares competition winner and a former chemist.

Last year Manek Growth was the worst of 734 investment funds with assets principally invested in the UK stock market.

Not only that but, based on figures by data provider Lipper Hindsight, Manek Growth was the only UK-invested unit trust or Oeic out of the 734 to register losses for the year. Its 0.2% deficit compares with an average return for the other funds of 12.3%.

In 2003, 2002, 2001 and 2000, the fund underperformed the FTSE All-Share index.

So last week, Financial Mail tried to speak to Manek about this wretched performance. He was unavailable.

Without a revival, Manek must consider closing the fund and repaying investors. Our view is that as a fund manager, he makes a good chemist.